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Scaled-back tobacco tax hike gets House committee backing

Scaled-back tobacco tax hike gets House committee backing

BATON ROUGE, La. (AP) — Louisiana's cigarette tax would be raised to match the rate charged by neighboring Mississippi, under a proposal that won approval Monday from the House tax committee as part of broader budget-balancing negotiations.

The bill offered a much smaller tax hike than health advocates wanted. But Rep. Harold Ritchie, D-Bogalusa, agreed to shrink the increase, saying he thought that was the only way to get his legislation to the full House for debate.

The proposal would raise Louisiana's cigarette tax from 36 cents per pack to 68 cents, rather than the $1.54 national average Ritchie initially sought.

The House Ways and Means Committee voted 11-5 for the reduced tax hike, which would generate an estimated $67 million in annual revenue for the state.

The tobacco tax increase is one of several proposals committee members advanced for debate as they seek new money to close a $1.6 billion budget shortfall next year. Lawmakers also are considering bills that would scale back tax breaks and change tax incentive programs.

Ways and Means Chairman Joel Robideaux, R-Lafayette, described tax breaks as a form of state spending that should be analyzed like other budget items and weighed against other priorities like higher education and health care services. He framed the financial negotiations as a "discussion about where to invest."

"Over our lifetimes, the Legislature has passed many tax incentives. I'm confident most, if not all, were well-intended," he said. "I'm not so confident that a calculation of 'return on investment' was required for their passage."

Aware of the difficulty of taking tax votes in an election year, Robideaux said: "Our citizens sent us here to represent them. Making difficult and unpopular decisions is included in that representation."

Advanced to the House floor for further consideration by the committee were measures to limit the tax credit Louisiana residents can take for income taxes paid to another state, to close corporate tax loopholes and to scale back and cap a solar tax credit program.

Ritchie, a smoker for 50 years and a funeral director, said the tax hike would lessen smoking, improve health and generate money for the state budget. He said polls suggest people favor the increase.

"As far as our politics goes, it's probably the easiest tax vote that we can make," he said.

Supporters of the bill described the health conditions caused by smoking, saying treatment for the poor and uninsured who rely on state health services for smoking-related illnesses costs Louisiana taxpayers about $700 million a year.

"The human and economic costs of smoking are staggering," said Stephen Kantrow, director of the Pulmonary/Critical Care Fellowship Program for the LSU medical school in New Orleans.

Only Virginia and Missouri have lower cigarette tax rates than Louisiana, according to the nonpartisan Federation of Tax Administrators.

Opposition came from the tobacco industry and cigarette sellers.

"This bill will hurt businesses and consumers. Louisiana will lose jobs," said Fred Hoyt, a former state senator who owns 21 convenience stores across southwest Louisiana. Nearly one-third of his business comes from tobacco sales.

Online: House Bill 119 can be found at www.legis.la.gov. Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.